Reform state, don't pretend and spend
Opinion
Reform state, don't pretend and spend
Declining revenue requires lawmakers to make bold fixes in government costs
Tom Watkins
Happy days are here again in Lansing. There seems to be a can't-we-all-just-get-along? refrain coming from both sides of the political aisle. This attitude adjustment is an improvement after the fiasco of 2007, when partisan bickering made Michigan look like a circus on steroids.
Gov. Jennifer Granhom has received accolades as she called for investment in more State Police troopers, K-12 education, community colleges and our state universities -- all with no new taxes or increased fees. While solid proposals, the question remains: Are they realistic?
They weren't during the 2006 gubernatorial election. There were calls for these same investments and, lo and behold, after the election, the state had a $1 billion deficit. And three departments over-spent their allotted budgets by $69 million.
But as the economy melts down, both sides of the political aisle seem content to play election-year economic make-believe about making tough choices about the state budget.
The outlook for state revenue may not be as good as state officials initially assumed. Prices of homes are plummeting as a result of the high foreclosure rate, causing local taxes collected by counties, municipalities and community colleges to plunge.
Auto sales are down. The national unemployment rate has jumped from 4.7 percent to 5 percent. Michigan's national-worst jobless rate is 7.6 percent.
The state treasurer and heads of the state House and Senate fiscal agencies have reduced their revenue estimates made last May by about $370 million for the current fiscal year, according to the Associated Press. January revenue came in about $40 million lower than expected after it was higher than expected in the two prior months.
The governor and Legislature increased taxes in 2007, dodging the tough, bold structural changes called for by the bipartisan Emergency Financial Advisory Panel. Following the panel's recommendations would have positioned our state for the new realities of a global economy.
Michigan may well be going on a spend-and-pretend spree when it should be on a reform-and-transform campaign.
Here are three reforms the Legislature should make now:
• Consolidations and agreements to share services could save millions of dollars. Michigan has 83 counties, more than 1,200 townships, nearly 500 cities and villages with less than 10,000 residents, more than 550 public school districts, hundreds of charter schools and 57 intermediate school districts. Eliminate the duplicated bureaucracy. Tie future state aid to demonstrating significant savings at all levels of government.
• Michigan is one of four states that spends more on prisons than on higher education. It has the highest incarceration rate of the Great Lake states. While our crime rate has declined since 1981, our prison population has soared. Contract out portions of the correction system and find other efficiencies while addressing sentencing guidelines that are doing nothing to keep us safe.
• More action is needed in the pensions and health care of educators and other public employees. The fixes to date are anemic. Changes can be made without unfairly burdening employees. Proposed spending increases for K-12 education will not cover rising pension, health care and other legacy costs.
The only thing worse than not investing in things that will help make us stronger is continuing to pretend we are -- only to pull the rug from under our schools, colleges, universities, cities and families when the economic fairy tale turns out to be make-believe.
We will spend the election-year money. But will state government make the changes to ensure the bills really will be covered?
Tom Watkins is an education and business consultant who was state superintendent of public instruction from 2001-2005 and state mental health director in 1986-1990. E-mail: letters@detnews.com.
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